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    The Potential Of Luxury Consumption In China

    2011/9/27 13:47:00 25

    Luxury Consumption Potential In China


    Despite China's luxury goods

    market

    Highly valued, specific

    Luxury goods

    Demand in China's third and fourth tier cities has been largely ignored.

    What is the similarity between the consumption patterns of online luxury goods and the three or four tier cities and the first and second tier cities?

    brand

    What can we expect from these increasingly important small cities?


    Li Deling, general manager of retail and lifestyle at market research company, said: "according to the latest research on the media, the consumption patterns of the lower tier cities are catching up with the first and second tier cities.

    In addition, people in the three or four tier cities are increasingly inclined to purchase luxury goods online, making the online world an important platform for luxury sales.

    It is found in the study that although the family income of the three or four tier cities is relatively low, their spending on different luxury categories is not lagging behind other cities such as Shenzhen, Hangzhou or Beijing.

    Their spending on jewellery, watches and travel is not significantly lower than that of the first and second tier cities.

    In addition, other online luxury goods such as clothing, electronics and household products are surprisingly similar in different cities.


    In fact, in the 14 provinces surveyed, the percentage of consumers consuming online on 12 cities in third provinces is higher than that in other second-tier cities.

    The online luxury market has seen strong growth in China's lower tier cities, thanks to the introduction of secondary sites into online stores.

    Li Deling said: "the main reasons for online shopping in all cities are very similar. Most of them think that online shopping is cheaper and more convenient than traditional shopping.

    Respondents in the three tier cities and respondents in the first tier cities agreed that online shopping brought them more joy.


    How to understand the potential of China's luxury consumption growth?

    The evening news interviewed Li Deling, general manager:


    Q: what is the difference between the past and present luxury consumption patterns in the third and four tier cities?


    A: the survey found that luxury consumption is a relatively new phenomenon. Therefore, the key point of the analysis is not the change of consumption pattern, but the fact that consumers living in third, fourth tier cities are constantly increasing. They can not only afford luxuries, but also use them now.

    This can be divided into many forms: to buy some cheaper products from the Chinese market abroad, and get the way through the physical stores, because the major luxury brands focus on expanding their presence in the Chinese market.

    Take Jinyuan company as an example, it innovates methods through online channels and delivers high-quality goods at reasonable prices.

    This also indicates that consumers in the third, fourth tier cities are beginning to pay attention to and recognize luxury brands and products.


    Q: what are the main differences between the consumption patterns of luxury goods on the higher (first, second tier) cities and the lower (third, fourth line) cities?


    A: according to the current consumer survey, we can find that in the lower tier cities, consumers seem to be driven mainly by the needs of success, wealth and status to buy luxury goods.

    Therefore, logo and brand awareness are very important. For example, prominent signs make it easy to recognize brands.

    In the higher tier cities, consumers seem to have changed the reasons for buying luxury goods and become a stronger element of self reward and self enjoyment.

    "I work very hard for these things, so I want to be satisfied with myself and be happy," which proves this point.

    This is the difference in satisfaction that consumers crave from products and brands.


    Q: Please predict the future potential of luxury consumption in China's third, fourth tier cities.


    A: as with many product categories, we see a larger group of consumers entering the international or global brand world.

    It means that in addition to constantly deepening their brand awareness, they also learn more about products, brand values, and the relative comparison between brands and products or services.

    All of these points to the trend that people are learning the luxury goods very fast, and many brands are competing for the confidence and trust of consumers.

    It also indicates that a larger number of potential luxury consumers can be moved through cognition, consideration and purchase cycle, which can interact with each other in terms of availability, selectivity and the suitability of goods.


    If you look at some of the top luxury brands, such as Hermes, because more front-line cities are becoming saturated, more consumers are living in the lower tier cities. The brand "up and down" launched by it clearly reflects the optimism of the global luxury brands and the determination to establish relationships with Chinese consumers.


    Note: China has more than 4000 third line and four tier cities.

    It is defined as a coastal, provincial or prefecture level city with a GDP ranking of 6-200 and a population ranking of 30-250.


     
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